OIL PRODUCTS: Oil Products End of Day Summary: Cracks Slide
Cracks are down on the day despite higher-than-expected stock declines, owing to demand concerns amidst increased trade protectionism.
- US gasoline crack down 0.7$/bbl at 23.45$/bbl
- US ULSD crack down 0.1$/bbl at 27.9$/bbl
- Gasoline stocks fell by 1.4mbbl with an increase in production and imports offset by higher weekly implied demand. The four week average implied gasoline demand ticked higher and now close to five year average seasonal levels.
- Distillates stocks unexpectedly drew by 1.3mbbl with a drop in production, lower imports and higher exports more than offsetting a dip in weekly implied demand. The four week average implied demand continue the recent fall back towards normal levels after the spike higher seen in early Feb.
- US East Coast refinery utilization rates hit lowest since July 2020, EIA says: Reuters
- Planned turnaround ongoing at Phillips 66's 258,500 b/d Bayway refinery, IIR says:
- The Transportation Department reported Wednesday that travel on U.S. roads in 2024 rose 1% to 3.28 trillion miles, a new yearly record and topping pre-COVID 19 levels for the first time.
- The US fuel oil market has experienced immediate shifts following the March 4 implementation of President Trump's tariffs on energy imports from Mexico and Canada, Platts said.
- Port of Fujairah oil product stocks fell 7.6% in the week ended March 3 to 18.88 mn bbls – the lowest in a month according to FOIZ data.
- China wants its refiners to produce less fuel and more petrochemical products as EV uptake alters consumption of diesel and gasoline, Bloomberg reports.
- US tariffs on Canada and Mexico is bullish for gasoline and diesel, but bearish for HSFO and, Platts said.
- Russian oil product exports remain resilient, with volumes climbing to the highest in a year in February, Vortexa said.
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US TSY OPTIONS: Large Short-Term Call Buy, Opener
- +45,600 wk2 TY 112.75 calls, 1 ref 109-01 (expire Friday) - new trade, no open interest on option that expires Friday
EURGBP TECHS: Bear Threat Remains Present
- RES 4: 0.8474 High Jan 20 and a key resistance
- RES 3: 0.8421 High Jan 27
- RES 2: 0.8381 20-day EMA
- RES 1: 0.8363 Intraday high
- PRICE: 0.8297 @ 16:46 GMT Feb 3
- SUP 1: 0.8296 Low Feb 3
- SUP 2: 0.8223 Low Dec 19 and a key support
- SUP 3: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range
- SUP 4: 0.8000 Round number support
EURGBP is trading in a volatile manner. The bear cycle that started Jan 20 remains in play and today’s price activity has strengthened - for now - a bearish threat. A resumption of weakness would pave the way for a move towards the first key support at 0.8223, the Dec 19 low. On the upside, the 20-day EMA is seen as a key short-term resistance - at 0.8381. A breach of the EMA would highlight a bullish development.
US: Republican Confidence In Economy Raises Risk Of Blowback For Trump
A new survey from Gallup has found that, “solid majorities of Republicans [voters] believe all five economic factors will improve over the next six months.”
- Gallup: “This includes three-quarters who say the stock market and economic growth will increase over the next six months and six in 10 who say inflation and interest rates will go down. Nearly as many, 57%, expect unemployment to go down, while 20% believe it will go up.”
- Republican optimism suggests there could be a snapback in approval for President Trump if his actions fail to bolster the economy and deliver on promises to lower interest rates and tackle inflation.
Figure 1: Expectations for Key Economic Factors, by Political Party “Over the next six months, do you think that each of the following will go up a lot, go up a little, remain the same, go down a little (or) go down a lot?”
Source: Gallup
